Germany: Part-Time Workers May Claim Overtime Pay Discriminates

A provision in a collective agreement that stipulates that overtime pay must exceed the regular work hours of a full-time employee constitutes discrimination against part-time employees. This applies in any case if the differentiation is not justified by objective reasons.

Facts of the Case

The employer, an outpatient dialysis provider, employed the plaintiff as a part-time employee to the extent of 40% of a full-time employee. The collective labor agreement (MTV) concluded between the employer and the trade union ver.di applies to the employment relationship on the basis of a reference in the employment contract. According to the MTV, a supplement of 30% is to be paid for overtime worked in excess of the monthly work hours of a full-time employee and which cannot be compensated by time off in the respective calendar month. As an alternative to payment of the supplement, a corresponding time credit to the work time account is provided for. At the end of March 2018, the employee’s work time account showed a work time credit of 129 hours and 24 minutes. The employer did not pay the employee overtime bonuses for these hours, nor did it make a time credit in the work time account.

The employee demanded that a further 38 hours and 39 minutes be credited to her work time account as overtime pay, as well as the payment of compensation in accordance with Section 15(2) of the General Equal Treatment Act (AGG) in the amount of a quarter’s earnings. She was of the opinion that the regulation in the MTV discriminated against her because of her part-time work. At the same time, she was indirectly disadvantaged because of her gender, as the employer predominantly employs women on a part-time basis.

The Decision

In October 2021, the Federal Labor Court of Germany, the Bundesarbeitsgericht (BAG), initially suspended the appeal proceedings and asked the Court of Justice of the European Union (EuGH) to answer questions regarding the interpretation of EU law. The BAG then awarded the employee the requested time credit and compensation in the amount of 250 euros (about $262). Based on the requirements of the EuGH, the BAG had to assume that the provision in the MTV is invalid due to a violation of the prohibition of discrimination against part-time employees insofar as it does not provide for a corresponding pro rata reduction of the limit for the granting of an overtime supplement in the case of part-time employment. 

There was no recognizable objective reason for this unequal treatment. The employee was therefore entitled to the additional time credit. 

In addition, she was to be awarded compensation, as the employee had also been indirectly discriminated against on the grounds of her gender. More than 90% of the group of part-time employees at the employer who were subject to the personal scope of application of the MTV were women. The amount determined was necessary, but also sufficient to compensate the nonmaterial damage suffered by the employee and to have the necessary deterrent effect on the employer.

Consequences for the Practice

The BAG’s decision has far-reaching consequences in practice. This concerns the future handling of overtime supplements for part-time employees, but also the risk of possible additional claims for the past. Existing provisions in collective bargaining agreements, but also in works agreements or individual contractual agreements that provide otherwise, are invalid if there is no objective reason for the unequal treatment of part-time and full-time employees. It is only possible to assess which objective reasons may be recognized once the reasons for the decision are available.

Practical Tip

Companies should check whether the collective bargaining or company regulations that apply to them only provide for the payment of overtime supplements once the regular work hours of full-time employees have been exceeded and whether there is an objective reason for this differentiation. If there is no such reason, the differentiation should be inadmissible and the payment of overtime bonuses to part-time employees should be adjusted. If collective bargaining agreements are applied, the employers’ associations should first wait for the reasons for the judgement of the BAG and then assess whether the relevant collective bargaining agreement provides a sufficient objective reason for the differentiation.

Bernd Pirpamer and Anja Renz are attorneys with Eversheds Sutherland in Munich, Germany. © 2025 Eversheds Sutherland. All rights reserved. Reposted with permission of Lexology.